Protecting the Self-Checkout from Common Scams

By :Dusty Lutz

May 21, 2018 08:00 AM

Self-checkout helps retailers tackle many challenges at the front-end – improving customer experience and satisfaction with flexibility and choice, moving smaller baskets through queues more quickly, and freeing up labor that is trapped at checkout to focus on higher value services in the store, to name a few. Among our retail clients, 76% have been able to cut queue times in half. Further, they’ve been able to achieve, on average, 140% more throughput and reduce checkout labor up to 30% without impact on service levels.

The convenience and time savings gained through self-checkout can come with risks, as thieves can feel more emboldened to commit fraud without an attendant at the stand. Why? It seems to be human nature that people act more honestly when looking someone in the eye than when interacting with a machine. The “banana trick” is one of the most widely known self-checkout scams recently highlighted in an article from The Atlantic – placing higher-priced items such as meat, seafood, or alcohol on the scale and coding them in as inexpensive items like bananas. Another is simply peeling a barcoded label from a lower-priced item and placing it over the barcode of a higher-priced item.

Theft and shrinkage levels in the retail industry have remained surprisingly consistent at a 1-2% of revenue, even with the advancement of various anti-fraud technologies. More alarmingly, the 2017 National Retail Security Survey (NRSS) reports that nearly 49 percent of retailers saw an increase in inventory shrink in 2016 versus previous years. This means, across the country, billions of dollars are literally walking out the door every year. So, if more traditional approaches to fighting shrink aren’t making a difference, what can retailers do to help prevent and reverse this expensive and disturbing trend?

We believe there is an opportunity to leverage emerging computer vision and artificial intelligence technologies as a more effective and less resource-intensive solution, to simultaneously improve both security and customer convenience. Our team at NCR is working to augment our existing self-checkout capabilities with some of these new capabilities. For example, if a shopper tries to leave an un-scanned item in the cart, the intelligent video system can detect this as it is happening. This means more immediate intervention opportunities, and a less labor-intensive monitoring process.

We’ve also developed solutions that leverage the scanners and scales that are already a part of the self-checkout station. These scanners, with cameras inside, can be augmented with machine learning capabilities to identify exactly what is placed on the scale, alerting remote attendants the moment inconsistencies occur to thwart “item swapping.” For example, our Produce Assurance capability knows the difference between a $0.49 per pound banana and a $17.99 per pound steak. We are using the same technologies to help speed up the self-scanning of produce items. Our Pick List Assist capability can identify bulk produce items placed on the scale and offer the shopper a short-list of most likely items to pick from, saving shoppers time and hassle and supporting pricing accuracy.

These are just a couple of quick examples of how retailers can further enhance the benefits of self-checkout to protect profit margins and reduce shrink. While the battle against theft and fraud will never be fully over, we’re working together with our clients to find new ways to mitigate risk by improving their security posture. And, we are continuing to look at ways to stay ahead of the latest checkout scams. So, if the banana trick is someday replaced with the next big scam to come along, we will be working on a solution that stops potential thieves in their tracks.

Dusty is Vice President and General Manager of NCR's Store Transformation business. In this role, he has global responsibility for bringing to market Store Transformation solutions across all Retail Industries and engaging with retailers around the world to improve the customer experience and gain operational efficiencies. NCR is the #1 global provider of Store Transformation solutions and Dusty led the team that introduced NCR's first Self-Checkout in 1998 and is considered the "father of self-checkout" at NCR.